Genting Singapore might get an offer from MGM Resorts
Genting Singapore $Genting Sing(G13.SG$ runs one of the two casinos in Singapore, it won the license together with Las Vegas Sands 16 years ago.
In the first place it was controversial to have casinos in Singapore. In 1970, Stanley Ho, who owns 19 casinos in Macau, proposed to then Prime Minister Lee Kuan Yew on building a casino in Singapore. The statesman said, "no, not over my dead body".
Never say never. The casino plan went ahead although and they have become iconic tourist attractions in Singapore.
The Covid period has been bad for the casinos and the other entertainment segments of the integrated resorts have been hit by the lack of tourists.
They have survived the worst and are now in the stage of recovery. While Singapore casinos are better positioned to capture gamblers since Singapore has opened up, those in Macau are still reeling from lockdowns ordered by the Chinese government.
MGM Resorts $MGM Resorts International(MGM.US$ generated 12.5% of its revenue from the casinos in Macau in 2021. This was a significant drop compared to the revenue contribution of 22.5% pre-Covid.
Coupled with China government's disdain for gambling, it could be a case where MGM Resorts is seeking to de-risk its Asian exposure by acquiring Genting Singapore.
Genting Singapore's revenue was about S$1.1 billion in 2021. It has yet to recover to pre-Covid levels where it used to rake in S$2.5 billion in 2019.
MGM Resort's China segment did US$1.2 billion in 2021 and US$2.9 billion in 2019. These are higher numbers after converting to SGD but Genting's numbers are still substantial if MGM Resort is looking for meaningful diversification.
The discussion is ongoing and it is not confirmed that they would acquire Genting Singapore. The market thinks that an offer is likely - Genting Singapore's share price jumped 7%.
Genting Berhad has a 52.6% stake in Genting Singapore. If this deal is accepted, MGM Resorts would have to make a mandatory offer to the rest of Genting Singapore shareholders under the Singapore Code on Take Overs and Merger.
The deal would also require Singapore Government's approval since it involves a change in the licensee.
It is an interesting development but it is still in early stages.
In the first place it was controversial to have casinos in Singapore. In 1970, Stanley Ho, who owns 19 casinos in Macau, proposed to then Prime Minister Lee Kuan Yew on building a casino in Singapore. The statesman said, "no, not over my dead body".
Never say never. The casino plan went ahead although and they have become iconic tourist attractions in Singapore.
The Covid period has been bad for the casinos and the other entertainment segments of the integrated resorts have been hit by the lack of tourists.
They have survived the worst and are now in the stage of recovery. While Singapore casinos are better positioned to capture gamblers since Singapore has opened up, those in Macau are still reeling from lockdowns ordered by the Chinese government.
MGM Resorts $MGM Resorts International(MGM.US$ generated 12.5% of its revenue from the casinos in Macau in 2021. This was a significant drop compared to the revenue contribution of 22.5% pre-Covid.
Coupled with China government's disdain for gambling, it could be a case where MGM Resorts is seeking to de-risk its Asian exposure by acquiring Genting Singapore.
Genting Singapore's revenue was about S$1.1 billion in 2021. It has yet to recover to pre-Covid levels where it used to rake in S$2.5 billion in 2019.
MGM Resort's China segment did US$1.2 billion in 2021 and US$2.9 billion in 2019. These are higher numbers after converting to SGD but Genting's numbers are still substantial if MGM Resort is looking for meaningful diversification.
The discussion is ongoing and it is not confirmed that they would acquire Genting Singapore. The market thinks that an offer is likely - Genting Singapore's share price jumped 7%.
Genting Berhad has a 52.6% stake in Genting Singapore. If this deal is accepted, MGM Resorts would have to make a mandatory offer to the rest of Genting Singapore shareholders under the Singapore Code on Take Overs and Merger.
The deal would also require Singapore Government's approval since it involves a change in the licensee.
It is an interesting development but it is still in early stages.
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Upncoming1841 : I seriously doubt that Genting would want to deal as there would always be only 2 licences in Singapore and the earnings have been resilient even during the pandemic. I predict the pop in the stock price from this news will burst after a few days. I am buying the DLC to short Genting.
102968938 : Don’t forget Genting lost heavy in Malaysia n the Cruise business